Goodman Group is investing NZ$490m (€279m), including a NZ$290m reinvestment, into the listed New Zealand offshoot, Goodman Property Trust (GMT), and to launch a fund management platform in New Zealand.
Goodman is selling the management rights to GMT, which is internalising its management, for NZ$290m, including a management fee of NZ$17.6m. It is reinvesting the proceeds into the internalised GMT to lift its stake from 25% to 31.8%.
As well, Goodman is investing NZ$200m into a new Auckland logistics property fund with a target of NZ$2bn funds under management in the next 3-5 years. Goodman is to co-invest with GMT and new investors to grow the platform.
Greg Goodman, the CEO of Goodman Group, said: “This transaction is all about growth and capturing the opportunity available in the New Zealand market. Additionally, access to alternative funding sources will allow GMT to finance this growth in a way that will generate significant value for GMT Unitholders.”
John Dakin, chair of Goodman New Zealand, said: “We believe internalisation will enable GMT to reach its full potential and create further value for all our stakeholders.”
GMT has a portfolio of NZ$4.5bn.
“With the flexibility to acquire assets on-market and directly from GMT’s existing portfolio, Dakin said, the funds management platform had the potential of scaling to around NZ$2bn within 3 to 5 years.”
James Spence, Goodman New Zealand CEO, said: “The establishment of a funds management business and introduction of new capital partners complements GMT’s current investment strategy.
“The positive income contribution from management fee revenue and an enhanced ability to recycle capital is expected to support annualised earnings growth of between 5% and 7% within the next three-to-five years.”
Deputy chair and independent director of Goodman New Zealand, David Gibson said: “The independent directors unanimously recommend that unitholders vote in favour of all three resolutions.” A shareholders’ meeting has been set for the end of March.
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